What is Plus500?
Plus500 is a UK based online trading broker, originally founded in Israel in 2008. It has around 270,000 active users and has subsidiaries in Australia, Bulgaria, Cyprus, Israel, Seychelles, Singapore and the United States. Along with Trading 212 and eToro, it is one of the leading providers of Contracts for Difference (CFDs), allowing investors to trade Exchange Traded Funds (ETFs), shares, commodities, indices and forex. It is regulated by the Financial Conduct Authority (FCA) and investors are covered by the Financial Services Compensation Scheme (FSCS).
Plus500 key features
- Access over 2,000 trading instruments
- Access to a demo account
- Risk management tools including 'stop limit' and 'stop loss' orders
- Real-time email, SMS and push notification price alerts
- Economic and corporate event calendar meaning investors can keep on top of economic news and market moves
- 24/7 customer support via email, live chat or WhatsApp
How to set up a Plus500 account
To open an account with Plus500 you'll first need to click on the 'Start trading' button in the top right-hand corner of the page. Next, you'll need to provide an email address and a case-sensitive secure password. Alternatively, you can sign up using a Google, Facebook or Apple account.
As soon as you sign up you will get full access to the demo account with a balance totalling £40,000. You can start placing trades on the demo account immediately, giving you the chance to see how the process of buying and selling works.
If and when you are ready, you can easily switch to a real money account via the menu. You'll need to complete your registration in order to start trading and the first step is to verify your account. The registration process is relatively lengthy and requires a number of questions to be completed. The first step is to provide your full name and date of birth as it appears on your official identification documents, such as a passport or driving licence.
Next, you'll need to confirm your country of residence, confirm whether you pay taxes in that country and that you are not a resident of the United States of America. After completing your address you will be asked about your trading experience, including whether you have placed any trades before (and how often) and whether you have any professional trading experience.
The next stage of the registration process asks about your employment status, your job title and income. Plus500 also ask whether your primary source of funds is through your employment or other investments. Next, you will be asked the approximate amount that you can afford to risk each year as well as the anticipated frequency of trades and primary purpose for trading.
Next, you will be asked a series of questions that tests your investment knowledge. I was particularly impressed with this part of the application process as it is designed to identify those that may not be suited to CFD trading. In fact, I purposely got some of the questions wrong and was impressed to see that Plus500 recommended that I did not open an account and to stick to the Demo account. That said, I was still able to ignore the warning and click a disclaimer that would allow me to open an account anyway, so while it should be commended, it isn't a perfect screening process.
The final stage of verification requires investors to verify their identification by uploading some documents for proof of identity. This includes photo ID in the form of either a driving licence or passport as well as additional documents for proof of address. Further details about uploading proof of identification can be found on the Plus500 website.
How much does Plus500 cost?
Plus500 does not charge any commission or transaction fees and instead applies a 'spread', which is an automatically adjusted price that incorporates a fee payable to Plus500. The spread can be easily calculated by simply subtracting the sell price from the buy price of any instrument that you may be interested in trading. Information relating to the spread of any instrument should be easy to find in the 'Details' link next to the name of the instrument that you wish to trade.
Plus500 fees and charges explained
While Plus500 does not charge a platform fee or commission on trades, there are a number of fees that investors should be aware of and these include:
- Overnight funding fee - The overnight funding fee is applied to your account when holding a position after a certain time period (displayed as the 'Overnight funding time'). The daily overnight funding percentage can be found in the 'Details' link next to the instrument's name.
- Currency conversion fee - Plus500 charges a currency conversion fee for all trades on instruments denominated in a currency different to the currency of your account. Plus500 states that this fee can be up to 0.7% of the trade’s realised net profit and loss and is reflected in real-time into the unrealised net profit and loss of an open position.
- Guaranteed stop order - Stop loss orders are not always executed at the exact preferred price, often due to volatile market conditions. A guaranteed stop order will force the position to close automatically at the chosen price, even if the market price surpasses it. Once your stated level is reached, the position will automatically close. A fee is payable as the trade is subject to a wider spread.
- Inactivity fee - A fee of up to $10 per month is charged after a period of 3 months of inactivity.
Plus500 minimum deposit
Plus500 has a minimum deposit of $100 if making payment by card or $500 via bank transfer.
Plus500 customer reviews
Plus500 is rated as 'Great' on independent review site Trustpilot, scoring 4.0 out of 5.0 from over 1,700 reviews. Many of the excellent reviews state that the app is easy to use and many like the fact that they can use the demo account without having to risk their own money. Of the bad reviews, many users have said that the fees are too complex and some have said that it takes too long to withdraw their money.
Plus500 is rated 3.9 out of 5.0 from almost 100,000 reviews on the Google Play store and 3.7 out of 5.0 from over 2,500 reviews on the Apple Store.
Plus500 pros and cons
- Slick online platform and easy to use mobile app
- Regulated by the Financial Conduct Authority (FCA)
- Financial Services Compensation Scheme (FSCS) protection
- Screening process identifying inexperienced investors
- Excellent demo account
- Lacking detailed research tools and features
- Inactivity fee charged after 3 months
- Some Trustpilot reviews question the level of customer service
Is Plus500 safe?
Plus500 is regulated by the Financial Conduct Authority (FCA) and traders are protected under the Financial Services Compensation Scheme (FSCS). Plus500 also serves traders in a number of other countries, such as Australia under the Australian Securities and Investments Commission (ASIC), New Zealand under the Financial Markets Authority (FMA) and South Africa under the Financial Services Board. It is worth remembering, however, that while it is well regulated, 72% of retail investors lose money when trading CFDs with Plus500.
There are a number of alternative platforms and apps that allow UK investors to trade for free and we compare Plus500 with a number of other trading apps below.
Plus 500 vs Trading 212
Trading 212 allows investors to trade from as little as £1 whereas there is a minimum investment of $100 with Plus500. Plus500 only allows CFD trading whereas Trading 212 has three different types of account including a CFD account, an investment account and an ISA account.
Plus500 vs Freetrade
Plus500 only allows CFD trading whereas Freetrade doesn't offer CFD trading at all. Investors looking to simply buy, sell and hold shares without using leverage would be better off opting to go with Freetrade and users that sign up via this link* can get a free share worth up to £200 (capital at risk). Freetrade has a low initial minimum investment of £2 compared to $100 with Plus500.
Plus500 vs eToro
eToro is the leading platform for social trading allowing investors to copy the trades of successful investors in real time. It has over 13 million users worldwide and provides a number of resources including detailed reporting and in-depth research. eToro has an initial minimum investment of $200 compared to $100 with Plus500. In addition, eToro charges a withdrawal fee of $5, something that isn't charged by Plus500.
Plus500 vs FinecoBank
FinecoBank was founded in 1999 and provides investment, trading and banking services to around 1.3 million customers. Finecobank offers a wide range of investment options including UK, US and EUR shares as well as CFD and forex trading. It is worth noting that FinecoBank does not charge any additional spread when trading CFD shares (UK, US and EUR). FinecoBank has no minimum initial investment amount, compared to $100 with Plus500.
Plus500 vs Trading212 vs eToro comparison table
|Inactivity fee||Up to $10 per month after 3 months||N/A||$10 per month after 12 months|
Plus500 provides a slick online platform as well as a user-friendly app allowing investors to trade a number of financial instruments at the click of a button. Plus500 provides some useful tools and features and is competitively priced and would be a sound choice for experienced and professional investors.
Inexperienced and beginner investors would be wise to heed the warning that is prominently displayed on Plus500's website explaining that "CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money". Inexperienced investors would be wise to start off with a Demo account or choosing a trading app that doesn't use leverage, such as Freetrade.
If a link has an * beside it this means that it is an affiliated link. If you go via the link Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. But as you can clearly see this has in no way influenced this independent and balanced review of the product. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Freetrade